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EXHIBIT 10.2
This Agreement made this 24th day of September 1996 by and between
Manchester Equipment Co., Inc., a domestic corporation having its principal
offices at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, hereinafter known as
(MANCHESTER), and Xxxxxxx Xxxxxx, 000 Xxxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000,
hereinafter known as (XXXXXX).
WHEREAS, XXXXXX, prior to May 7, 1996, was an officer, director,
employee and shareholder of Manchester, and
WHEREAS, on May 7, 1996, XXXXXX resigned as such officer and director
of MANCHESTER, and terminated his employment by MANCHESTER, all of the
foregoing to be effective June 30, 1996, and
WHEREAS, pursuant to a written Agreement therefor, dated May 7, 1996,
(the Agreement), XXXXXX sold and transferred to Manchester ten shares of
MANCHESTER stock, for a consideration and upon terms and conditions as set
forth in said Agreement, and
WHEREAS, the Agreement contains certain "Rights of Election" to XXXXXX
pertaining to the future sale by XXXXXX to MANCHESTER of the remainder of the
MANCHESTER shares owned by XXXXXX, (the XXXXXX shares), namely ninety (90)
shares in number, and
WHEREAS, the said Agreement further contains certain other provisions
as to the said XXXXXX shares in the event MANCHESTER subsequently entered into
an Underwriting Agreement for an "Initial Public Offering" (IPO), and
WHEREAS, MANCHESTER has entered into a Letter of Intent with Ladenburg,
Xxxxxxxx & Co. Inc. as the Underwriter for the commencement of such Initial
Public Offering, and
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WHEREAS, for various reasons, the Underwriter has requested that XXXXXX
enter into an Agreement with MANCHESTER, at this time, pertaining to the XXXXXX
shares. NOW, THEREFORE, IN CONSIDERATION OF THE SUM OF $10.00 EACH TO THE OTHER
IN HAND PAID, AND IN FURTHER CONSIDERATION OF THE TERMS AND CONDITIONS OF THE
WITHIN AGREEMENT, IT IS AGREED AS FOLLOWS:
First: MANCHESTER and XXXXXX herein agree that the Agreement and Addendum
to Agreement of May 7, 1996 (the Agreement) as between them is herein
incorporated by reference, with the same force and effect as if same were fully
set forth herein.
SECOND: Reference is herein made to the provisions of Paragraph Fifth
"Mandatory Election by Xxxxxx" of the Agreement, as hereinafter set forth:
"FIFTH: MANDATORY ELECTION BY XXXXXX -- At all times subsequent to the
execution of the within Agreement, in the event the Company enters into an
Underwriting Agreement for IPO purposes, Xxxxxx, shall have thirty (30)
days after the mailing to him, Certified Mail, Return Receipt, of a written
notice of the execution of such Underwriting Agreement, to make an election
as to the following:
A. To continue the terms of the within Agreement, i.e., the Rights of
Election Rights herein granted to Xxxxxx (PARAGRAPH FOURTH:) shall continue
and remain in effect; the result of which is that the total of the then
remaining Xxxxxx shares shall BE "restricted" from sale or any other
disposition by Xxxxxx, other than the "Rights of Election" herein granted
to him as set forth in PARAGRAPH FOURTH: of the within Agreement.
OR
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B. To avoid the "Rights of Election" provisions of the
PARAGRAPH FOURTH: i.e. The Xxxxxx shares will no longer be
restricted in any manner as Agreement as to the Election Rights
herein granted to Xxxxxx (PARAGRAPH FOURTH;) i.e., the Xxxxxx
stock would no longer be restricted in any manner as to sale or
other disposition; PROVIDED, HOWEVER, the said Xxxxxx shares
will then be subject to any "LOCK-UP" Agreements as may be
required by either the Underwriter representing the Company as
to the IPO, or the restrictions placed on said stock by all
applicable SEC Rules and Regulations.
1) Xxxxxx shall exercise the Election granted to
him by the terms of the within Paragraph, pursuant to a written
notice thereof forwarded to the Company, Certified Mail, Return
Receipt. The failure of Xxxxxx to make such Election in the time
and manner as aforesaid, shall be deemed as an automatic
Election by Xxxxxx to continue the "Rights of Election" granted
to Xxxxxx as per PARAGRAPH FOURTH; of the within Agreement, and
as to A. OF THE WITHIN PARAGRAPH."
THIRD: XXXXXX herein exercises the "Right of Election" as set forth in
Paragraph FIFTH B. of the Agreement and waives the Right of Election as set
forth in Paragraph FIFTH A. of the Agreement, and further agrees to be subject
to the following terms and conditions:
A. the XXXXXX shares will be subject to:
1. The six {6} month initial "Lock-Up" period as
required by the Underwriter, and
2. Any and all sales of the XXXXXX shares in the
"After-Market", following the initial Lock-Up period, will be as follows:
The right to sell {in brokerage transactions}, in any three month
period, such
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number of shares not exceeding the greater of {i} One {1%} percent of the then
outstanding shares of common stock of Manchester, and {ii} The average weekly
trading volume in the Manchester common stock, in the over-the-counter market,
during the preceding four calendar weeks.
B. In the event of a secondary public offering by Manchester, at such
time as Xxxxxx should still be the owner of any of the original Manchester
shares presently owned by him, Xxxxxx is herein granted so-called "Piggyback"
registration rights as to such remaining shares; provided, however, that such
registration rights will be in a direct proportion to the percentage of shares
being registered by Xxxxx X. Xxxxxxxxx, the principal shareholder of
Manchester.
EXAMPLE: Xxxxxxxxx proposes to register ten {10%} percent of his
remaining Manchester shares in a secondary offering - Xxxxxx shall have the
right to have included in such offering no more than ten {10%} percent of his
then remaining original Manchester shares.
The provisions of the within sub-paragraph B. shall further apply to any
tertiary or later public offering by Manchester, in the event Xxxxxx should
still be the owner of any of the original shares presently owned by him.
C. Reference is herein made to the provisions of Paragraph Ninth of
the Agreement, pertaining to the Life Insurance Programs {policies} presently
maintained by Manchester as to the life of Xxxxxx.
The provisions of said Paragraph Ninth of the Agreement will be deemed
deleted from the Agreement in their entirety, and of no further force and
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effect; provided however, that prior to the cancellation by Manchester of said
Life Insurance policies, or either of them, Manchester shall offer to assign
said policy or policies to XXXXXX or his nominees for a consideration of Ten
($10.00) Dollars.
D. Reference is herein made to the provisions of Paragraph
THIRD of the Agreement pertaining to the Stockholders' Agreement of September
18, 1990, as between Manchester, and Messrs. Xxxxxxxxx, Xxxxxxx and Xxxxxx, as
the then sole Stockholders of Manchester.
All of the terms, covenant and conditions of the said
Stockholders' Agreement are herein deemed to be of no further force and effect,
and is to be deemed terminated as to the effective date of the closing of the
Initial Public Offering.
E. Reference is herein made to the provisions of Paragraph
TWELFTH of the Agreement pertaining to the XXXXXX medical and hospital benefits
to be maintained by MANCHESTER. MANCHESTER herein agrees that it will maintain
the presently existing medical and hospital insurance for the benefit of XXXXXX
until June 1, 1999, at which time the obligation of MANCHESTER to maintain such
coverage shall automatically cease and terminate.
FOURTH: XXXXXX and MANCHESTER herein acknowledge that the execution of
the within Agreement by XXXXXX shall be deemed to be the exercise of the
"Rights of Election" granted to him by Paragraph FIFTH of the Agreement, and as
cited in Paragraph SECOND of the within Agreement.
FIFTH: It is specifically understood and agreed that the provisions
of the
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within Agreement are expressly conditioned upon the successful conclusion of
the Initial Public Offering as contemplated by the Letter of Intent between
Ladenburg, Xxxxxxxx & Co., Inc., as the Underwriter and MANCHESTER. In the
event the said Initial Public Offering is not concluded for any reason
whatsoever, the terms and conditions of the within Agreement shall be deemed
null and void, of no further force and effect, AND the provisions of Paragraph
FIFTH (all parts) of the Agreement shall remain in full force and effect.
SIXTH: This Agreement shall be binding upon the parties hereto, and
their respective heirs, successors and/or assigns.
SEVENTH: This Agreement may be altered, modified, or amended, solely by
a written Agreement therefor duly executed by the parties hereto.
In the Presence of:
/s/ XXXXXX XXXXXXX
------------------------------------- Manchester Equipment Co., Inc.
By: /s/ XXXXX XXXXXXXXX
/s/ XXXXXXXXX XXXXX ----------------------------------
------------------------------------- Xxxxx X. Xxxxxxxxx, President
/s/ XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx, Stockholder
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